Correlation Between ArcelorMittal and Ivanhoe Electric
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal and Ivanhoe Electric at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ArcelorMittal and Ivanhoe Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA ADR and Ivanhoe Electric, you can compare the effects of market volatilities on ArcelorMittal and Ivanhoe Electric and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ArcelorMittal with a short position of Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and Ivanhoe Electric.
Diversification Opportunities for ArcelorMittal and Ivanhoe Electric
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ArcelorMittal and Ivanhoe is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA ADR and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric and ArcelorMittal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ArcelorMittal SA ADR are associated (or correlated) with Ivanhoe Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Electric has no effect on the direction of ArcelorMittal i.e., ArcelorMittal and Ivanhoe Electric go up and down completely randomly.
Pair Corralation between ArcelorMittal and Ivanhoe Electric
Allowing for the 90-day total investment horizon ArcelorMittal SA ADR is expected to generate 0.48 times more return on investment than Ivanhoe Electric. However, ArcelorMittal SA ADR is 2.06 times less risky than Ivanhoe Electric. It trades about 0.08 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about 0.0 per unit of risk. If you would invest 2,189 in ArcelorMittal SA ADR on November 2, 2024 and sell it today you would earn a total of 334.00 from holding ArcelorMittal SA ADR or generate 15.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA ADR vs. Ivanhoe Electric
Performance |
| Timeline |
| ArcelorMittal SA ADR |
| Ivanhoe Electric |
ArcelorMittal and Ivanhoe Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and Ivanhoe Electric
The main advantage of trading using opposite ArcelorMittal and Ivanhoe Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal position performs unexpectedly, Ivanhoe Electric can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ivanhoe Electric will offset losses from the drop in Ivanhoe Electric's long position.| ArcelorMittal vs. Agnico Eagle Mines | ArcelorMittal vs. Pan American Silver | ArcelorMittal vs. Kinross Gold | ArcelorMittal vs. Newmont Goldcorp Corp |
| Ivanhoe Electric vs. Sun Country Airlines | Ivanhoe Electric vs. Procter Gamble | Ivanhoe Electric vs. Norfolk Southern | Ivanhoe Electric vs. WK Kellogg Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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